Amazon Shuts Four Fresh Stores in Southern California Amid Strategic Shift
Amazon is set to close four more Amazon Fresh supermarkets located in Southern California as part of a broader reevaluation of its grocery business strategy. The closures are scheduled to occur over the coming weeks, according to a company spokesperson who confirmed the news to CNBC. This latest wave of closures follows similar shutdowns at four other U.S. Fresh locations earlier this year in Washington, Virginia, New York, and a Los Angeles suburb. The move underscores Amazon’s ongoing pivot toward emphasizing its Whole Foods brand and expanding its online grocery delivery capabilities.
Details of the Southern California Store Closures
The affected stores are in La Verne, Mission Viejo, La Habra, and Whittier. At the La Verne location, employees were informed during an all-hands meeting that the store would close by mid-November. Those impacted will receive severance packages and Amazon is working to reassign employees internally where possible.
“Certain locations work better than others, and after an assessment, we’ve made the decision to close these Amazon Fresh locations,” said Amazon spokesperson Griffin Buch. “We’re working closely with affected employees to help them find new roles within Amazon wherever possible.”
Amazon regularly reviews its store portfolio to optimize performance, which may result in openings, relocations, or closures. Currently, the company operates over 60 Amazon Fresh stores in the U.S. but has reduced its footprint by shuttering underperforming locations and removing certain technologies such as the “Just Walk Out” cashierless system from these stores. In parallel, Amazon has been downsizing its Go cashierless convenience stores to better align with its evolving retail strategy.
Evolution of Amazon’s Grocery Strategy
Amazon’s pursuit of a significant presence in the grocery sector spans nearly two decades, beginning with the launch of Amazon Fresh in 2007 as a fresh food delivery pilot. The acquisition of upscale grocer Whole Foods in 2017 for $13.7 billion marked its largest acquisition and a major step into physical grocery retail. The Amazon Fresh chain, targeting mass-market consumers, was introduced in 2020. However, the rapid expansion was curtailed in 2023 amid cost-cutting measures under CEO Andy Jassy, prompted by macroeconomic challenges such as rising interest rates and inflation. Amazon paused further Fresh store openings and closed several locations to reassess how to differentiate the chain in a competitive grocery market.
Continued Investment and Innovation in Grocery
Despite the closures, Amazon continues to invest in grocery innovation. The company maintains approximately 500 Whole Foods stores nationwide and has launched smaller “daily shop” Whole Foods outlets in urban areas like New York City. Recently, Amazon introduced a new price-conscious grocery brand available both online and in physical stores. Additionally, same-day delivery of fresh foods has been expanded to more U.S. regions.
“We are innovating and investing in making grocery shopping easier, faster, and more affordable,” Buch emphasized. “Amazon serves 150 million U.S. customers with millions of grocery and everyday essentials available for online delivery, pick-up, or in-store shopping.”
CEO Andy Jassy has expressed confidence in the grocery sector’s long-term potential, highlighting the strong sales performance of everyday essentials within the online grocery business during the company’s annual shareholder meeting in May.
FinOracleAI — Market View
Amazon’s decision to shutter four additional Fresh stores in Southern California reflects a strategic recalibration rather than a retreat from grocery. The company is focusing on optimizing its physical footprint while leveraging its strengths in online grocery delivery and the established Whole Foods brand.
- Opportunities: Expansion of online and same-day delivery services; growth of price-conscious grocery brand; leveraging Whole Foods market presence.
- Risks: Potential loss of market share in mass-market grocery segment; challenges in differentiating Amazon Fresh; operational costs amid inflation.
Impact: The closures are a measured step to streamline operations and focus investment on scalable grocery formats and digital delivery, positioning Amazon to maintain competitiveness in a dynamic grocery market.
